Exhibit 10.12
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTIONS 200.80 (B)(4),
200.83 AND 230.406
CONTRACT FOR PURCHASE AND SALE OF EQUIPMENT AND SERVICES
This Contract for Purchase and Sale of Equipment and Services (the
Contract is made and entered into as of this 28th day of December, 1999 (the
Effective Date) by and between Zero Mountain Cold Storage, an Arkansas
Corporation (the Buyer) and Titan Scan Corp., a Delaware Corporation (the
seller) with reference to the following recitals of fact.
RECITALS:
A. Buyer is a cold storage facility owner and point of distribution for
poultry and other products.
B. Seller is a Delaware corporation engaged in the business of designing,
manufacturing, selling, installing, operating and servicing product
pasteurization and sterilization equipment and systems, including electron beam
and x-ray equipment and systems.
C. Buyer has agreed to purchase from Seller, and Seller has agreed to
sell to Buyer, an x-ray system to be used by Buyer for pasteurizing
sterilizing poultry and food products. Buyer has also agreed to purchase from
Seller, and Seller has agreed to sell to Buyer, all additional equipment and
systems required by Buyer on the terms and conditions contained in this
Contract.
D. The parties are desirous of documenting their understanding of the
terms and conditions which will govern the purchase and sale transactions
contemplated herein.
NOW, THEREFORE, the parties agree as follows:
1. EQUIPMENT PURCHASED
Upon the terms, and subject to the conditions set forth in this Contract,
Seller shall sell, transfer, assign, convey and deliver to Buyer, for the
purchase price specified in paragraph 2, below, one (1) SUREBEAM x-ray food cold
pasteurization sterilization system (the "System"). The System will conform in
all respects to the Final specifications which will be completed and delivered
to Buyer and be capable of meeting all USDA, and FDA specifications regarding
food irradiation on or before the date established in paragraph 2.1 of this
Contract for payment of the first installment payment in accordance with this
Contract. Buyer's consent shall not be unreasonably delayed or withheld. Below
is a summary of the preliminarily agreed upon System components. The Buyer and
the Seller will work together after execution of this agreement and jointly
prepare a detail System specifications list:
IN WITNESS WHEREOF, the parties hereto have executed this Contract as of
the effective date that is first set forth above. As Amended by Xxxx XxXxxxx and
Xxxx Xxxxxx.
ZERO MOUNTAIN COLD STORAGE
By: /s/ Xxxx Xxxxxx
---------------------------------------
Xxxx Xxxxxx, President and CEO
TITAN SCAN CORP.
By: /s/ Xxxx XxXxxxx
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CONTRACT FOR PURCHASE AND SALE OF EQUIPMENT AND SERVICES
This Contract for Purchase and Sale of Equipment and Services (the
Contract is made and entered into as of this 28th day of December, 1999 (the
Effective Date) by and between Zero Mountain Cold Storage, an Arkansas
Corporation (the Buyer) and Titan Scan Corp., a Delaware Corporation (the
seller) with reference to the following recitals of fact.
RECITALS:
A. Buyer is a cold storage facility owner and point of distribution for
poultry and other products.
B. Seller is a Delaware corporation engaged in the business of designing,
manufacturing, selling, installing, operating and servicing product
pasteurization and sterilization equipment and systems, including electron beam
and x-ray equipment and systems.
C. Buyer has agreed to purchase from Seller, and Seller has agreed to
sell to Buyer, an x-ray system to be used by Buyer for pasteurizing
sterilizing poultry and food products. Buyer has also agreed to purchase from
Seller, and Seller has agreed to sell to Buyer, all additional equipment and
systems required by Buyer on the terms and conditions contained in this
Contract.
D. The parties are desirous of documenting their understanding of the
terms and conditions which will govern the purchase and sale transactions
contemplated herein.
NOW, THEREFORE, the parties agree as follows:
1. EQUIPMENT PURCHASED
Upon the terms, and subject to the conditions set forth in this
Contract, Seller shall sell, transfer, assign, convey and deliver to Buyer,
for the purchase price specified in (1) SUREBEAM x-ray food cold
pasteurization sterilization system (the "System"). The System will conform
in all respects to the Final specifications which will be completed and
delivered to Buyer and be capable of meeting all USDA, and FDA specifications
regarding food irradiation on or before the date established in paragraph 2.1
of this Contract for payment of the first installment payment in accordance
with this Contract. Buyer's consent shall not be unreasonably delayed or
withheld. Preliminary and Final Specifications are hereinafter referred to
collectively as "Equipment Specifications" and will be jointly determined by
Buyer and Seller:
1. Electron Accelerator System and Controls;
2. All required product conveyors;
3. Equipment assembly;
4. Equipment status and validation;
5. Dosimetry equipment: maintenance training and operating training;
6. All necessary x-ray targets;
7. Control system;
8. All required System software; and
9. All reasonable, customary Systems engineering.
Seller shall also sell, transfer, assign, convey and deliver to Buyer
all non-proprietary, non-confidential System documentation, including, without
limitation, recommended spare parts list, service and maintenance schedules,
as-built drawings and schematics, and operations, training, service and/or
repair manuals (the "System Documentation").
2. PURCHASE PRICE
Subject to any adjustments required by this paragraph, the base purchase
price (the "Preliminary Purchase Price") to be paid by Buyer to Seller for
the System shall be [...***...] dollars. The Preliminary Purchase Price shall
be adjusted, either upward or downward, upon the written approval and consent
of both Buyer and Seller as reasonably required by the Equipment
Specifications (the "Purchase Price"). The parties acknowledge that the
Purchase Price is a "fixed fee" which is deemed to include all sales and
similar taxes, payment for all delivery, transportation, installation,
assembly, calibration, testing, validation, and certification costs and
expenses, as well as the provision of all services incident thereto, all in
accordance with the Equipment Specifications.
2.1 PAYMENT OF PURCHASE PRICE
The Purchase Price to paid by Buyer to Seller for the System shall be paid
in installments in accordance with the following payment schedule:
FIRST PAYMENT: [...***...] of the Purchase Price upon the
closing by Buyer of the debt financing.
*Confidential Treatment Requested
SECOND PAYMENT: [...***...] of the Purchase Price upon the
expiration of [...***...] from the due date for
the first payment.
THIRD PAYMENT: [...***...] of the Purchase Price upon the
expiration of [...***...] from the due date for
the second payment.
FOURTH PAYMENT: [...***...] of the Purchase Price upon the
expiration of [...***...] from the due date for
the third payment.
FINAL PAYMENT: [...***...] of the Purchase Price shall be paid
either upon the expiration of [...***...] from
the due date of the forth payment, or acceptance of
the System by Buyer in accordance with paragraph 4
below, whichever date is later, provided however,
that the Final Payment shall be made by Buyer to
Seller no later than [...***...] so long as delivery
and/or acceptance of the System has not been delayed
due to circumstances beyond Seller's control.
3. DELIVERY OF SYSTEM
3.1 TIME OF DELIVERY
The parties anticipate that once this Contract is executed, it will take
approximately nine (9) to twelve (12) months from the date Buyer obtains the
debt financing to commence and complete the Equipment Specifications and
manufacture of the System. Seller agrees to use commercially reasonable
efforts to complete the System during this time period, deliver it to Buyer,
install it at Buyer's facilities, and render it operational. Prior to the
date Seller has completed the manufacture of the System, Buyer and Seller
shall agree, in writing, on the date for delivery for the System to Buyer's
facilities.
3.2 PLACE OF DELIVERY
Prior to the date Seller has completed the manufacture of the System,
Buyer shall specify, in writing, the location to which Seller shall deliver
the System. Seller shall thereafter deliver this System F.O.B. at the
location so identified by Buyer.
4. INSTALLATION
Upon delivery of the System, Seller shall properly assemble and install
the System and all components therof, at Buyer's facilities. Prior to
Buyer's acceptance, Seller shall also do all of the following:
a. Properly calibrate and test the System, and all components
thereof, to ensure that it is operating properly and within acceptable
tolerances in accordance with the Equipment Specifications;
b. Obtain, or provide Buyer with all necessary information and/or
documentation necessary for obtaining, all required federal, state, local
and/or other governmental approvals, licenses
*Confidential Treatment Requested
and/or certifications required for the operation of the System, and its
components:
c. Provide to Buyer, and its employees, the training as set forth
in the Equipment Specifications, in the proper use and operation of the
System, and each of its components, such that Buyer can properly operate the
System independently and without the continued assistance of Seller.
d. Deliver to Buyer all System Documentation as required under
paragraph 1 of this Contract.
The System shall be deemed accepted by Buyer upon performance by Seller
of items a-d of this Section 4, provided Seller is not in material breach of
any other term of this Contract.
5. RISK OF LOSS
The risk of loss, injury or destruction of the System, its components,
machinery, equipment and materials, from any cause whatsoever, shall be born
by the Seller until delivery to Buyer's facilities in accordance with
paragraph 3.2 of this Contract.
6. WARRANTIES
6.1 SELLER'S WARRANTIES
Seller warrants that the System, and each of its components, will be
free from any defects in design, materials and workmanship for a period of
[...***...] (hereinafter the "Warranty Period") from the date of acceptance
of the System by the Buyer or [...***...] from the date of delivery of the
System, whichever first occurs. Seller further warrants that the System will
function in accordance with the Equipment Specifications, and that the System
will conform in all particulars to the requirements of any federal, state or
local governmental rule, regulation or standard governing the operation or
use of the System, including, without limitation, rules and regulations
promulgated by the United States Department of Agriculture. THE ABOVE
WARRANTIES ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, AND
SELLER SPECIFICALLY WARRANTIES THIS EQUIPMENT FOR MERCHANT ABILITY AND
FITNESS FOR A PARTICULAR PURPOSE.
Notwithstanding anything to the contrary, in no event shall Seller's
liability arising out of or in connection with Seller's performance under
this Contract exceed the Purchase Price.
6.2 REPAIR OBLIGATION
Promptly upon receipt of written notification from Buyer, Seller shall
inspect the equipment. If,
*Confidential Treatment Requested
in Seller's opinion, there is a defect in design, materials or workmanship
covered by Seller's Warranty, then Seller shall repair or replace, at its
election, without cost or expense to Buyer, such defects in design, materials
or workmanship.
7. EXCLUSIVITY SEE ATTACHMENT:
7.1 EXCLUSIVE SUPPLIER
Except as set forth in paragraphs 7.2 and paragraph 8 hereof, Buyer
agrees that Seller shall be Buyer's exclusive source for electron beam
x-ray or ionizing energy sterilization equipment, systems and Services. For
purposes of this Contract, the term "Services" shall mean and refer to those
services identified in paragraph 8 of this Contract.
7.2 EXCEPTIONS TO EXCLUSIVE SUPPLIER PROVISIONS
Buyer shall not purchase or otherwise obtain from anyone other than
Seller any electron beam and/or x-ray technology product pasteurization or
sterilization equipment, systems or Services including but not limited to
cobalt, cesium or any ionizing radiation products unless:
a. Seller is (i) in material breach of any of the terms of this
Contract, or the Operating Agreement, which is being executed concurrently
with this Contract; and (ii) Seller fails to cure such breach within a
reasonable time of receipt of notice from Buyer.
b. Seller becomes insolvent or seeks protection, voluntarily or
involuntarily, under the Bankruptcy Laws;
c. Seller ceases business, or ceases planning, designing,
manufacturing, installing, operating, repairing or maintaining irradiation
equipment and systems;
d. Buyer requires irradiation equipment and/or systems (a) of a
type, size, configuration, capacity, performance or power not manufactured or
sold by Seller and/or (b) within a reasonable time frame, Seller fails to
provide such equipment and/or systems.
8. ADMINISTRATIVE, CUSTOMER SUPPORT AND OTHER SERVICES
Upon the written request of Buyer, Seller shall provide to Buyer
administrative, accounting and other customer support functions and technical
services (hereinafter "Services") in connection with the
operation of Buyer's business and the System.
Any such Services that will be provided By Seller to Buyer at Seller's
cost are set forth in Exhibit C attached hereto.
The Services set forth in Exhibit D are those Services that Buyer shall
obtain exclusively from Seller. Buyer shall not procure or arrange for such
Services from any supplier other than Buyer. Such Services set forth in
Exhibit D shall be provided by Seller to Buyer at Buyer's expense at terms
and conditions to be set forth in a separate written agreement between the
parties. That separate agreement will set forth all details of such Services
including, without limitation, the type, cost and quantity of such Services.
9. TERMINATION
This Contract, and the parties' duties and obligations hereunder, may
terminated for cause by either party, upon the occurrence of one or more of
the following events:
a. The other party becomes insolvent or seeks protection,
voluntarily or involuntarily, under the Bankruptcy Laws;
b. The other party is in default of any material provision of this
Contract and such default has not been Promptly commenced and diligenctly
completed within a reasonable time after receipt of notice thereof;
c. Buyer fails to make payment of any amount due to the Seller
pursuant to the terms hereof on the due date and such delinquency is not
cured within [...***...] days following receipt of written notice from Seller
to Buyer.
10. INDEMNITY
a. Buyer shall indemnify and hold Seller harmless and will, upon
request, defend Seller against all actions, proceedings, claims, demands,
suits, outlays, damages or expenses, including reasonable attorneys fees and
other costs that may be assessed against Seller, arising out of the acts or
omissions of Buyer, its representatives, agents or employees.
b. Seller shall indemnify and hold Buyer harmless and will, upon
request, defend Buyer against all actions, proceedings, claims, demands,
suits, outlays, damages, or expenses, including reasonable attorneys fees and
other costs that may be assessed against Buyer arising out of the acts or
* Confidential Treatment Requested
omissions of Seller, its representatives, agents or employees.
c. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY
INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES EVEN IF SUCH PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
11. CONFIDENTIALITY
The parties anticipate that both Buyer and Seller may learn confidential
and proprietary information of the other as a consequence of the transactions
contemplated by this Contract. The parties therefore agree, on behalf of
themselves, their agents, employees, parents, subsidiaries, officers,
directors, and all other persons acting on or for their behalf, to keep all
proprietary information confidential and to not disclose such information,
either directly or indirectly, to any third party, or to use any such
proprietary information for any purpose other than performance of this
Contract without the prior written authorization from an authorized
representative of the appropriate party. For purposes of this Contract, the
information described below shall not be deemed Confidential or Proprietary
Information:
a. Information that either party knows about the other prior to
the execution of this Contract;
b. Information that is publicly known, or becomes publicly known,
through no breach by either party to this Contract; and
c. Information that is rightfully obtained by either party from any
third party who has no duty of confidentiality under this Contract.
The parties mutually agree to take all necessary steps, and to prepare
and execute all documents necessary, to protect and prohibit the disclosure
of confidential information under this paragraph.
12. ASSIGNMENT AND/OR DELEGATION
Neither this Contract, nor any right, obligation or duty hereunder of
either party, may be assigned to, or assumed or performed by, any third party
without the prior written consent of the other party. Any purported
assignment or delegation made without compliance with the requirements of
this paragraph 13 shall be wholly void and ineffective for all purposes.
13. INTEGRATION
This Contract sets forth the entire agreement and understanding of the
parties with respect to
transactions contemplated hereby and supercedes any and all prior contracts,
agreements and understandings of the parties relating to the subject matter
hereof. No representation, promise or statement of intention has been made by
any party to the other which is not embodied in this Contract.
14. AMENDMENT/WAIVER
This Contract may only be amended, modified, superceded or canceled, and
any of the terms, representations, warranties, covenants and conditions may
be waived, only by an instrument in writing executed by the parties, or in the
case of a waiver, by the party waiving compliance.
15. FORCE MAJEURE
If any party is unable to carry out its obligation under this Contract
because of force majeure, the parties agree to suspend performance until the
event creating the force majeure is over. For purpose of this Contract, force
majeure includes, but is not limited to, storms, floods, earthquakes, acts of
God, the acts of civil or military authority, quarantine restrictions, riots,
strikes, fires, lock-outs, labor disputes, commercial impossibility,
explosions and bombings, the inability to obtain permits or other
governmental approvals, or because of any other cause or causes beyond the
reasonable control of the party seeking to be excused from performance. The
party who is unable to perform because of a force majeure agrees to resume
performance of its obligations under this Contract upon the termination of
the event or events which excused performance.
16. NOTICES
All notices, requests, demands and other communications which are
required or permitted to be given under this Contract shall be in writing and
shall be deemed to have been duly given upon delivery if delivered
personally, or two (2) days after mailing by registered or certified mail,
return receipt requested, postage prepaid as follows:
1. If to Buyer: Zero Mountain Cold Storage
0000 Xxx 00 Xxxxx
Xxxx Xxxxx, XX 00000
2. If to Seller: Titan Scan Corp.
0000 Xxxxxxx Xxxx Xxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
or to such person or address as any party shall have specified by notice in
writing, to other parties hereto.
17. INTERPRETATION
This Contract shall be governed by and construed in accordance with the
laws of the State of California.
18. SEVERABILITY
The invalidity or unenforceability of any provision of this Contract
shall not affect the validity or enforceability of any other provision
contained herein.
19. ARBITRATION
Except as otherwise provided in the Agreement, any controversy between
the parties arising out of this Agreement shall be submitted to the American
Arbitration Association for arbitration in San Diego, California. The costs
of arbitration, including any American Arbitration Association administration
fee, the arbitrator's fee, and costs for use of facilities during the
hearings, shall be borne equally by the parties to the arbitration.
Attorney's fees may be awarded to the prevailing or most prevailing party at
the discretion of the arbitrator. The provisions of Sections 1282.6, 1283 and
1283.05 of the California Code of Civil Procedure apply to the arbitration.
The arbitrator shall not have any power to alter, amend, modify or change any
of the terms of this Agreement not to grant any remedy which is either
prohibited by the terms of this Agreement, or not available in a court of law.
20. EXISTING DEBT OBLIGATION
Since the buyer is currently under obligations to The Metropolitan Life
Insurance Company with regard to loan covenants, and operating ratios, should
this agreement in any way create a situation of default with buyers existing
debt then this agreement is null and void.
21. JOINT VENTURES
The buyer and seller agree to form a limited liability corporation which
will be the buyer of this system. This company will have the right of first
refusal to provide food pasteurization services to warehouses or
distributors of refrigerated food products.
IN WITNESS WHEREOF, the parties hereto have executed this Contract as of
the effective date that is first set forth above.
ZERO MOUNTAIN COLD STORAGE
By: /s/ Xxxx Xxxxxx
----------------------------------
Xxxx Xxxxxx, President and CEO
TITAN SCAN CORP.
By: /s/ Xxxx XxXxxxx
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Xxxx XxXxxxx
